Dow went up 60, advancers modestly ahead of decliners & NAZ slid back 34.  The MLP index crawled higher in the 224s & the REIT index was off 2+ to the 371s.  Junk bond funds were a little lower & Treasuries saw heavy selling, driving yields higher ahead of the FOMC meeting.  Oil dropped 1+ to the 75s & gold fell 7 to 1991.

AMJ (Alerian MLP Index tracking fund)

Regulators took possession of First Republic, resulting in the 3rd failure of an American bank since Mar, after a last-ditch effort to persuade rival lenders to keep the ailing bank afloat failed.  JPMorgan Chase (JPM), a Dow stock, already the largest US bank by several measures, emerged as winner of the weekend auction for First Republic.  It will get all of the ailing bank's deposits& a “substantial majority of assets,” the bank said.  JPM is getting about $92B in deposits in the deal, which includes the $30B that it & other large banks put into First Republic last month.  The bank is taking on $173B in loans & $30B in securities as well.  The Federal Deposit Insurance Corp (FDIC) agreed to share losses on mortgages & commercial loans that JPM assumed in the transaction, & also provided it with a $50B credit line.  JPM will mak a payment of $10.6B to the FDIC.  The transaction will cost the FDIC's Deposit Insurance Fund an estimated $13B, according to the regulator.  By way of comparison, the SVB process cost the fund about $20B.  JPM stock rose 3.53.
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JPMorgan Chase takes over First Republic after US seizure of ailing bank

Treasury yields edged higher ahead of a highly anticipated meeting of the Federal Open Market Committee.  The yield on the 10-year Treasury was trading around 3.481%, up 3 basis points & the 2-year Treasury yield was up almost 4 basis points at 4.101%.  Yields & prices move in opposite directions & one basis point equals 0.01%.  The Fed is expected to announce a 25-basis point interest rate hike Wed at the conclusion of its meeting.  Investors are particularly interested in any guidance on how long rates will remain elevated & when rate cuts could get underway.  It follows GDP figures last week indicating slower-than-expected economic growth in Q1.  The personal consumption expenditure index, meanwhile — one of the Federal Reserve's preferred inflation gauges — rose on the previous qtr, coming in at 4.2%.

10-year Treasury yield ticks higher ahead of Fed meeting

The crisis that led to the downfall of 3 regional US banks in recent weeks is largely over after the resolution of , according to JPM CEO Jamie Dimon.  JPM emerged as the winner of a weekend auction for First Republic after regulators decided that time had run out on a private sector solution.  The FDIC seized the bank & JPM just announced that it was acquiring nearly all of the deposits & most of the assets of First Republic.  “There are only so many banks that were offsides this way,” Dimon said shortly after the deal was announced.  “There may be another smaller one, but this pretty much resolves them all,” Dimon added.  “This part of the crisis is over.”  In the wake of the sudden collapse in Mar of Silicon Valley Bank (SVB) & Signature Bank, investors have punished other lenders that had similar characteristics to SVB.  Companies with the highest percentage of uninsured deposits & losses on their balance sheet were most scrutinized.  The Mar turmoil exposed poor management by some midsized banks that essentially bet that interest rates wouldn't rise; when rates did rise, the banks were caught “offsides” with unrealized losses from bonds on their balance sheet.  But the $30B injection of deposits into First Republic last month bought time for the industry, allowing mid-sized banks to report Q1 results in recent weeks that in many cases showed a stabilization of deposits.  That eased investor fears that many more lenders would soon topple.

Jamie Dimon says ‘this part of the crisis is over’ after JPMorgan Chase acquires First Republic

Cleaning up the banking mess was not easy, but it looks like there is a sense of calm currently.  Investors will now concentrate on the announcement by the FOMC after its meeting on Wed.

Dow Jones Industrials